Dow Falls 204 Points in First Triple-Digit Loss of 2012
NEW YORK (TheStreet) -- U.S. stocks saw their biggest one-day drop in nearly three months as the markets digested more evidence that Europe is sliding deeper into the doldrums and dragging down the pace of global growth.
The Dow Jones Industrial Average dropped 203.9 points, or 1.6%, at 12,759, making for the index's first triple-digit decline this year. All 30 Dow components closed in the red except Intel.
The S&P 500 was down 21 points, or 1.5%, at 1343, and the Nasdaq finished behind by 40.2 points, or 1.4%, at 2,910. Basic materials, consumer cyclical stocks and financials were among the sectors posting the biggest losses as the CBOE volatility index jumped 16.2% to 20.97.
"The market has been sending warning signals lately and now it looks like the dip-buyers may be losing their zeal," noted James "Rev Shark" DePorre, founder and CEO of Shark Asset Management. "We have had only feeble bounce attempts after the big gap-down open. I don't think we've seen that sort of action all year."A lack of U.S. economic news coupled with fears about slowing global growth hits stocks at the open. The S&P 500 has now tumbled two days in a row after finishing at its highest level since 2008 at the start of the month. The European Union's statistics office confirmed Tuesday a previous report that Europe's economy shrank in the fourth quarter. Investments pulled back by the most in three years, while exports and consumer spending also declined. The continent's gross domestic product contracted 0.3% from the third quarter. Exports dipped 0.4% after a 1.4% increase in the preceding quarter. Household spending fell 0.4%.. The report added to news from yesterday that China is targeting slower growth this year. The euro was approaching a three-week low amid concerns that Greece won't be able to complete its big restructuring deal. The country's private creditors have until Thursday night to accept the burden of a bond swap needed for Greece to receive its second, € 130 billion bailout package. Those who agree to the deal are expected to lose 53.5% of the value of any Greek bonds they own. A default in Greece could cause more than € 1 trillion ($1.3 trillion) of damage to the region, according to Reuters. London's FTSE closed lower by 1.65%, and Germany's DAX finished down 3.06%. In Asia, Japan's Nikkei Average finished lower by 0.6%, while Hong Kong's Hang Seng index closed down 2.2%. Appetite for risk assets is likely to be kept in check until investors get a fuller picture of the global economy following Friday's U.S. nonfarm payrolls report. China's industrial output, investment and retail sales data is also scheduled for release on Friday.
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